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US house prices carry on falling

Every month, it seems, the US housing market gets worse. Spring should have provided some respite, as it is the peak time for sales. But instead, as the chart shows, the benchmark S&P/Case-Shiller house price index fell again to a new record low, and is now 14% below this time last year. ‘There are very […]

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Sinopec receives $1bn subsidy in April

Sinopec is now losing 3000 yuan ($425) on every tonne of oil product sold, due to China’s price freeze, according to Sinopec spokesman Chen Ge yesterday. And this is on top of official government subsidies paid to Sinopec, which rocketed to $1bn in April. This was more that the entire subsidy paid in 2007. And […]

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PE margins back to 2003 levels

The excellent ‘ICIS Weekly Margin Report – PE’ is starting to tell a very sad story about polymer margins. The chart (above) shows that the ethylene margin, in yellow, has been falling steadily since the start of the year. The same is true for the HDPE margin, in blue. And the Report notes that if […]

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Airlines and the chemical industry

There are some close parallels between the airline and chemical industries. Both are very capital intensive, use oil as a key raw material, and are heavily dependent on operating rates as a driver of profitability. Therefore one probably needs to pay close attention to news that American, historically the strongest US airline, has announced it […]

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The impact of $200/bbl oil?

I am in Tallinn, Estonia, where the Petrochemicals Feedstocks Association has kindly invited me to talk about ‘Feedstocks for Profit’, our forthcoming Study on feedstocks supply and demand. Much discussion, as you wouild expect amongst oil and naphtha traders, centred around the potential for $200/bbl oil. None of them thought it unlikely, and many thought […]

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Oil hits $140/bbl

Chemical companies are still getting used to the idea that crude is trading above $100/bbl. For many of them, this was a complete shock, as many had believed the consensus view and budgeted for a $70/bbl average in 2008. Now, however, worse news is in prospect as forward prices have been racing away this week. […]

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Russia’s oil trader

Increases in Russian oil supply have played a major role in balancing world oil markets, at a time when other non-OPEC sources such as the N Sea have been declining. Production rose from 6.2mbd in 1999 to 9.6mbd by 2006. But as I noted last month, there are signs it may now have peaked. The […]

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Central bankers recognise a ‘bubble’

For years, former US Fed Chairman Alan Greenspan said that it was impossible to recognise an ‘asset bubble’ until after it had burst. Thus the dot-com bubble, and the US housing bubble, were able to grow without central bank interference. Now however, Fed Governor Frederic Mishkin has broken ranks and provided this detailed description of […]

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Saudi to boost oil supply

Oil markets could become more volatile again, on news today that Saudi is to pump an extra 3000kbd of oil in June. Other Gulf States including Kuwait and UAE may follow its lead.

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The graph the Bank of England didn’t publish

Every 3 months, the Bank of England publishes its Inflation Report. This is packed with useful charts and commentary on just about every aspect of the world economy. It also normally includes the Bank’s own indicator of where UK house prices are headed. This is based on surveys by the Royal Institute of Chartered Surveyors, […]

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